Problems With Stakeholders

In a work place, managing stakeholder relationships means dealing with peers, superiors, subordinates, business partners, clients, customers, suppliers and volunteers. Although it may seem like each of these people should know his own responsibilities and objectives, and that managing each one is a waste of time, effective stakeholder relationships actually make a real different on the outcomes of your work and the organization. However, even in the best-managed relationships, there are still common problems that can occur.

Lack of congruence can create its own set of stakeholder problems. This occurs when a group of stakeholders — volunteers for example — have a different set of values than other stakeholders, such as management. In this example, the volunteers may be focused on giving a helping hand and getting as many people as possible to use the organization’s services, while management may have a mission that focuses on the quality of service and one-on-one relationships. In this case, the volunteers will want to do more promotion to get more clients, while the managers will want to stay focused on outreach to get the right types of clients. The lack of congruence will then cause its own set of problems, because the priorities of the diverse stakeholders are completely different. This could lead to conflict between both groups, and confusion among the public.

When a specific stakeholder's activities are not in line with the organization’s values and norms, there can be a stakeholder legitimacy problem. This type of problem usually occurs during a single isolated event that simply does not align with the organization's mission. Such conflict can be felt through other stakeholder groups. It is common in organizations that make the use of volunteer groups. Although the volunteers’ goal is to help make the organization better, they sometimes misunderstand the true nature of the organization and hold activities or make comments that go against the core values of the organization. Their role in the organization and their purpose is then put in question.

Another type of legitimacy problem is organizational. When the organization violates the norms and values of its external stakeholders, it faces another type of problem. For example, if a nonprofit arts organization decides to support a controversial artist, some of its donors will questions the legitimacy of the artist — and the organization — because they will not agree with the choice that the organization made. This can greatly impact the funding and the reputation of the organization, as well as all the other people supported by it.

One more challenge that is felt through organization of every size and type is the generational gap and differing expectations and motivations. Previous generations saw commitment to an organization as a long-term relationship, and took part in many activities out of a sense of duty. Nowadays, younger generations seem to get involved in short-term commitments and are much more motivated by what they can gain from the experience. This generational difference means that each stakeholder’s approach and commitment to an organization's values and mission will be different and can cause some conflicts.